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Indonesia PMI September 2023

Indonesia: PMI declines for the first time in four months in September

The S&P Global Manufacturing Purchasing Managers’ Index (PMI) eased to 52.3 in September from August’s 53.9. As such, the index remained above the 50.0 no-change threshold but signaled a softer improvement in manufacturing sector operating conditions. September saw the first decline in the PMI since May.

The tail end of the third quarter saw a moderation due to slowing growth in both output and new business. Additionally, employment levels increased only marginally. Nevertheless, both production and new orders rose robustly thanks to stronger demand, particularly from abroad. Improving vendor performance and higher purchasing activity also supported the readings.

Meanwhile, input costs rose at the strongest pace since April amid reportedly higher pricing for raw materials, transportation and financing. In turn, selling charges were raised once again. Moreover, firms grew more optimistic in the month due to expectations of improving market conditions and stronger sales in the coming year.

Jingyi Pan, economics associate director at S&P Global, commented on the release: “While there were some signs of inflationary pressures picking up in the goods producing sector, they remain muted by historical standards and are unlikely to garner much concern at present. Better vendor performance should help to keep a lid on cost pressures and also help to support further improvements in production.”

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